Alaska starts 2nd session over pipeline - Yahoo! News

JUNEAU, Alaska - Alaska lawmakers convened their second special session of the year on Wednesday, with Gov. Frank Murkowski filing two familiar bills related to his proposed natural gas pipeline deal with three major oil companies.
The governor's proposal would replace Alaska's oil and gas production tax with one based on 20 percent of oil companies' net profits in Alaska. He also proposes changing the state's Stranded Gas Development Act to give him the legal standing to negotiate a long-term oil tax freeze — the second time the Legislature will consider that bill.
Both bills, if passed, are to be included in the gas pipeline contract proposal Murkowski has already negotiated with the three companies that would build the pipeline, BP PLC, Exxon Mobil Corp. and ConocoPhillips.
The bills have died in past legislative sessions. Without them, the governor's gas deal with the oil companies is considered dead.
The pipeline would pump more than 4 billion cubic feet a day of gas to North American homes, and proponents have touted the project as a way to lessen the nation's dependence on foreign energy sources. State politicians see the gas pipeline doing for the state what the trans-Alaskan oil pipeline did after it was built in the 1970s: Bringing billions in royalties and taxes to the state and forming the cornerstone of the economy.
Murkowski will address the Legislature in a joint session Thursday.
Murkowski's tax proposal has the same elements as before, a 20 percent tax rate on companies' profits, which would be reduced by tax credits on 20 percent of the companies' capital investments in the state.
The Legislature has not stuck with that so-called "20-20" plan, with most lawmakers saying they should tax industry more. They have heard proposals ranging from a tax of 21.5 percent to 25 percent of profits. Plus, they added a sliding scale that would increase the tax rate when oil prices are high.
The compromise that failed in the last special session would have set a 22.8 percent base tax rate, which would have brought an additional $2.5 billion a year to the state in tax revenue when oil is $70 per barrel.
Murkowski spokesman John Manly acknowledges that the last two sessions have shown the Legislature isn't likely to stick with the governor's 20-20 plan this time, but "Governor Murkowski believes the 20-20 is a balanced approach to increased taxation," he said.
No real work was expected on the bills until after July 24. Several lawmakers had already planned to attend a meeting of the Pacific Northwest Economic Region next week in Edmonton, Canada, and the special session is expected to be put on hold for that week.